Espada May Have Violated Laws, Cuomo’s Office Says

Pedro Espada Jr., the State Senate majority leader, may have violated several laws by using a network of health clinics he controlled as a source of income for his personal and political use, according to court papers filed on Wednesday by the state attorney general’s office.

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The filing offers the first official details from the office’s investigation into potential wrongdoing by Mr. Espada.

The filing, made in State Supreme Court in Manhattan, seeks to compel the senator to comply with a nearly five-month-old subpoena, undercutting Mr. Espada’s claims that he has been cooperating with investigators.

The office says in court papers that it has found evidence of potential fraud, violations of state election law, state law regarding nonprofit groups and state labor law, as well as potential tax liabilities. The investigation by Attorney General Andrew M. Cuomo is focused on Mr. Espada’s role as chief executive of the Soundview HealthCare Network, a Bronx-based group of tax-exempt health clinics.

The court filing says that Soundview has a contract with a for-profit management company, Soundview Management Enterprises L.L.C., that is controlled by Mr. Espada, allowing him “effectively to siphon off and otherwise divert money from Soundview for Mr. Espada’s own personal and political benefit.”

Evidence collected by Mr. Cuomo’s office, the filing says, suggests that money paid by Soundview to the management company was also used to “pay Mr. Espada’s campaign expenses, including printing, campaign office rent and personnel costs.”

The court filing says that Soundview paid Mr. Espada’s campaign workers, either directly or through the management company.

The attorney general’s office is also investigating why Mr. Espada’s management company was paid nearly $400,000 annually for janitorial services that appeared to cost far less, about $270,000, when the clinics performed the services themselves before 2008. A former employee told the attorney general’s office that no change to the service was made when the management company purportedly took over the work.

The filing also says that Mr. Espada’s political campaign, which has had a long history of election law violations, failed to disclose contributions of money or services from Soundview Management. The lack of disclosure could lead to potential fraud charges and election law violations, the filing says.

And because Soundview HealthCare Network, a tax-exempt charity, is prohibited from contributing to political campaigns, it could potentially be dissolved by the attorney general’s office, which has jurisdiction over charities.

Mr. Cuomo’s office had no comment on the filing.

Mr. Espada reacted angrily to the filing, accusing Mr. Cuomo of “conducting a witch hunt driven by his political ambitions” and “using me, the state’s highest-ranking Hispanic elected official, as his personal political piñata.”

He said that his lawyers had already provided Mr. Cuomo “with tens of thousands of documents he has requested, and will continue to do so.”

The legal fight is likely to cause waves within the Democratic Party. Mr. Espada became one of the most controversial figures in the party when he sided with Republicans last summer and led an attempted coup in the Senate. He was given the title of majority leader as part of a deal to return to the Democratic caucus, but the job ceased to be the top position in the Senate.

The Senate is now led by Senator John L. Sampson of Brooklyn, the head of the Democratic caucus. Mr. Sampson had no comment on the legal action, a spokesman said on Wednesday.

In October, Senator Hiram Monserrate, a Queens Democrat who joined Mr. Espada in his coup attempt, was convicted of misdemeanor assault related to a dispute with his companion; his colleagues are weighing a vote to expel him from the Senate.

The subpoena in the Espada case was served on Soundview on Aug. 25, and lawyers representing Mr. Espada’s management company have submitted two documents, far short of what was sought by Mr. Cuomo’s office, according to the filing. The attorney general’s office called and sent letters to the management company’s lawyers more than three months ago, but they have gone unanswered, the filing said.

The State Senate was also subpoenaed last week as part of the investigation. That subpoena focused on communications between Mr. Espada or his staff and any agency or authority relating to allocations or expenditures. The subpoena also sought records of Mr. Espada’s official travel, lodging and per diem expenses, as well as financial disclosure documents filed to the Legislative Ethics Commission, which is responsible for enforcing ethics and disclosure laws.